When Best to start collecting Social Security?

[Hugh R]

David (Targa911s) mentioned in his birthday thread that he's 62 and is going to start collecting SS next month. My BIL hit 62 a few months ago and got a good union pension and began collecting SS as well. So I got to thinking when best to start collecting it. I will "retire" in about 5 years when I hit age 64.

My SS in today's dollars would be as follows:

Age 62-$1,869/mo or $22,408/year

Age 66-$2,576/mo or $30,916/year

Age 70-$3,462/mo or $41,544/year

Assuming I live to be 80 (who knows, lifestyle doesn't predict much more, but anyway). I used this Net Present Value Calculator

Present Value Calculator

assuming 2% Cost of Living adjustment. Also, it assumes that SS doesn't change, they don't "means test" me, etc.

I get the following NPVs:

Retire at 62- $358,xxx

Retire at 64-$326,xxx

Retire at 66- $405,xxx

Retire at 70-$414,xxx

It seems odd, but my NPV would be higher retiring at 62 rather than 64, because I'd get two years more of SS payments from age 62 to age 64 at the lower benefit range. $1,869/mo if I retire at either 62 or 64. That is kind of academic since to get the most out of my employer's pension funds, I really need to retire at 64 anyway.

If you don't need the money, Like my BIL, who has a nice comfortable pension, it makes more sense, to me at least, to retire at 64, but not apply for SS until age 66. I'd get a net present value of about $80K more up until age 80.

Thoughts?

[John Rogers]

I retired at age 64 and while I did the same math work up as you did, decided I wanted to be able to just teach some evening college computer classes with a lot less stress than my "day" job as an Oracle DBA. About a week into the new year, we had a bad storm roll into San Diego and I was laying in bed, drinking my morning cup of coffee and reading the paper WATCHING the traffic nightmare and the thought occurred to me that retiring was the best decision I had made in many years! I think it is not all about the $$$?

I hope you have checked to make sure the union retirement does not have any effect of your SS payment? My racing buddy found he was not eligible for SS because of the employee union setup they had. Not sure exactly what it is but he lost on the SS.

Finally, if you do any work before you get to age 65 then make sure to watch how much you make as there is a sliding limit.

[tabs]

And EXACTLY what makes you think that there will be a SS when you retire?

[ckelly78z]

There is also the factor of wanting the money during your younger, more active years to travel, buy a Porsche, golf....etc. With all of the health issues I have been through, i'm going to take it as soon as I can, reduced amount or not, so I can enjoy life as long as I can. I would hate to wait until 70 to get the big money and then have something happen that I couldn't enjoy it.

I have a nice company pension, along with a decent 401K account that means I probably won't really need the SS to live comfortably, but I want to help my kids, travel and not worry about buying a new vehicle or buying old ones to fix up.

I think by the time i'm 80, I will have slowed down enough to not need the extra money and will live a pretty simple, cheap life.

[Hugh R]

Agree with all the sentiments. Get it while you can makes a lot of sense. And TABS, as I stated, it may or may not be there.

[pwd72s]

With all the trillion$ being falsely pumped into the economy. heavy inflation will eventually happen. How bad it will be or how soon it will happen is anybody's guess. This points to taking it as soon as you can get it. As Tabs points out, no real guarantee how long it will be there either.

What the Government gives, the Goverment can take away.

[Porsche-O-Phile]

I suspect folks will get every single dollar they're promised under SS. The problem is those dollars are going to be worth a fraction of what they are currently due to inflation and currency devaluation.

I look at SS as beer money. My real retirement fun is a mix of 401k, private investment, etc. maybe a reverse mortgage thrown in if necessary but I'd prefer the kids get the house(s) free and clear instead.

[ckelly78z]

I guess, unlike my parents, or my inlaws, I would love to help my kids financially as much as possible to make thier lives a bit easier than mine. Taking SS early would allow me that, because, rather like Porshe-O-phile, I look at it as beer money or mad money.

[Bill Douglas]

Originally Posted by tabs

And EXACTLY what makes you think that there will be a SS when you retire?

My thoughts exactly regarding my own situation. That's why I'm working getting my rentals houses sorted. I suspect in New Zealand, depending on who is in government at the time, it will start to be means tested a week or two before I'm eligible.

[motion]

I thought that if you had certain assets, retirement income, etc., you can't even collect SS? I could be wrong, but thought I had hear that. I'm just way too young to be thinking of that stuff quite yet

[Hugh R]

Income earned while drawing SS, not pensions, can count against you. I just re-ran the numbers from drawing at 64 and 66 up to age 70, and I'd pull in more money drawing earlier up to that age (70). I heard the radio financial planner Ric Edelman once talk about how you can get very, very screwed by the IRS when pulling money from your IRA/401K if you miscalculate your expect number of years between retirement and when you kick the bucket. IIRC, he gave an example where the penalties can be over 100% of what you draw in a given year.

[dan88911]

Hi guys, I recently read a article in Kiplinger's, Retirement Report.
Titled Strategies to boost your Social Security.
Lots of infor: the fundamentals, if you're single, if your married, smart strategies for married couples etc.

They also offer a customized report for optimizing your own benefits at
kiplinger.socialsecuritysolutions.com, might be worth a look.

[Noporscheform]

Rather than look at the NPV, look at SS as earned income replacement. Maximize your earned income replacement via pension, SS, immediate annuity and investment earnings.

Under the current process SS benefits go up by 8% per year making it a very good investment, when delayed. If you delay until the end you will be maximizing your monthly SS income and have replaced a greater portion of your earned income. This may or may not be the maximum value. That will depend on how long you live. - if you happen to out live the averages -this could be the winning strategy.

This also gives a method of actually planning the use of your other assets. A portion of them can be dedicated to providing incremental income until SS starts. It may even make sense to use an immediate annuity to convert a portion of your assets into a specific income stream for a period certain - I.e. the number of years between retirement and age 70 social security starting.

The benefit of each of these steps is it may allow you to be more comfortable with a more aggressive investment portfolio as you have bought a significant amount of time with a known outcome, this may increase overall long term net worth for estate planning purposes. If nothing else it may allow you to sleep with less worrying about the investment markets and their impact on your future lifestyle.

[Rick Lee]

Originally Posted by ckelly78z

I guess, unlike my parents, or my inlaws, I would love to help my kids financially as much as possible to make thier lives a bit easier than mine.

Hopefully, you gave your kids all the tools when they were young to become successful adults, so they don't need your help. I sure would hate for my folks to suffer a dime because of me. I'm 41 and can't bear the thought of making my folks pay for anything when we're together.

[rfuerst911sc]

I turned 55 yesterday and plan to retire in 5 years when I'm 60. Have a company pension and 401k. I will probably start collecting SS when I'm 62-63. I could care less that it will be a reduced amount, there is no guarantee how long I will live. If it's 2 years or 20 no difference to me.

[DARISC]

Originally Posted by motion

I thought that if you had certain assets, retirement income, etc., you can't even collect SS? I could be wrong, but thought I had hear that. I'm just way too young to be thinking of that stuff quite yet

Nah. You paid into it and, when your time comes, it's yours for the taking.

removed - ns

HAHAHAHA!

FWIW, you, Motion, are one of a very few on this forum that I'd buy a beer.

[ckelly78z]

Originally Posted by Rick Lee

Hopefully, you gave your kids all the tools when they were young to become successful adults, so they don't need your help. I sure would hate for my folks to suffer a dime because of me. I'm 41 and can't bear the thought of making my folks pay for anything when we're together.

I don't fear for thier futures, we have taught them the true meaning of a dollar and both have good work ethics. I know many times in our 25 years of marriage, it sure would have been nice to get some of the help our friends were getting from thier parents, like help on a home down payment, family trips, paying off student loans when grandkids came, having a car fixed when they couldn't afford it.

[craigster59]

No one on their deathbed said "I wished I'd worked more." Take your piece of the pie and enjoy retirement. Besides, any responsible, sane person has already set themselves to live on a more frugal path when they retire anyway. Take what you can as early as you can and adjust your lifestyle accordingly.

[targa911S]

I did ALL that math. Go at 62 Hugh. Enjoy the money while yo are young. Waiting is not worth it.

[DARISC]

Originally Posted by craigster59

...any responsible, sane person has already set themselves to live on a more frugal path when they retire anyway...

As a responsible, sane person, one should set one's self to live on a less frugal path when they retire...IF they are content with bowing to having been serfs to their employers and being content with bowing down, saying, in effect, Oh, thank you for setting me free to live out my life frugally!

Screw that, amigo!!! Wake the fk up and smell the fking coffee! You are worth more than that! You are worth as much as any money grubbing, capitalist pig employer you ever had! Why the fk denigrate yourself to a station below theirs simply because you we're a hard worker, but weren't of their money grubbing, vulture mindset?!!